Diamondhead Casino extends LOI with Phoenix

DIAMONDHEAD — Diamondhead Casino Corporation (DCC) has agreed to extend a letter of intent entered into with Phoenix Gaming and Entertainment, LLC, for 60 days.

DCC owns, through its wholly-owned subsidiary, Mississippi Gaming Corporation, approximately 404 acres of land in Diamondhead on the Mississippi Gulf Coast. The property fronts Interstate 10 for approximately two miles and the Bay of St. Louis for approximately two miles.

On Dec. 10, 2010, DCC entered into a letter of intent with Phoenix. Under the terms, Phoenix proposes to purchase 25 acres of land for $1 million per acre to be used, in part, for the construction of a casino.

DCC has agreed to give Phoenix an additional 15 acres of land to be used for the construction of roadways and right-of-way requirements, greenery, buffering, on-site mitigation and/or the footprint for a possible parking garage.

DCC retains the right to construct its own casino on the remaining land, but Phoenix gets the right of first refusal with respect to any additional, future gaming development by other parties on the property.

The letter of intent was originally scheduled to automatically terminate Jan. 31 if no definitive agreement was in place. The parties have agreed to extend this termination date to April 1, 2011.

DCC said it remains in discussions with other parties with respect to the remainder of the property.

Phoenix was originally founded by Edward M. Tracy, now president and COO of Sands China, Ltd. Phoenix operations are now managed by James Ahearn, who serves as chairman and CEO of the company and David Jonas, who serves as president and COO.

Jonas, who recently served as COO of Philadelphia Park Casino and who previously served as regional president in charge of Harrah’s four Atlantic City casinos (Caesars, Harrah’s, Bally’s and Showboat), speaking on behalf of Phoenix, stated: “We are very excited about the Diamondhead project and the potential revenue it can generate because of its location on a major interstate highway. This is a unique opportunity because approximately 18 million vehicles pass the site annually, an attribute which other competing casinos in the area simply do not enjoy.”